House prices continue to fall

New figures show that the pace of the fall in house prices accelerated in January. Average house prices dropped by 1.4% in the month, according to the house price index compiled by Permanent TSB and the ESRI. This compares with a 0.9% fall in December and 0.5% in November. Over 12 months, the decline was 9.8%. The average price paid for a house in January was €258,006.

However, these findings are not a true reflection of the current situation in Ireland. Dermot O'Leary, Chief Economist of Goodbody Stockbrokers, said in November 2007, that three reasons can be cited for a discrepancy between its expectations of house price falls and the permanent tsb / ESRI House Price Index:

1. The data are reflective of prices at the mortgage payment stage of the house-buying process. This can be some 3-4 months after a sales price is agreed, and, in a slower market, this lag could get extended further. Therefore, there is a significant lag between market prices and the official house price data.

2. The type of properties in the ptsb database may be concentrated towards the lower price range in the market. While recognising the fact that the ptsb data takes account of the different characteristics of the house, the average price in the country is well below the estimates contained in the dataset from the Department of the Environment.

3. Price incentives, which have become common for new scheme developments, would not get reflected in the data.

End of 'one-off housing' in parts of Mayo?

Mayo county councillors will try this week to persuade government planners that their new county plan, which allows for one-off housing, should not be reversed. One-off housing refers to the building of individual rural houses, outside of towns and villages. It contrasts with housing developments where multiple units are constructed as part of a housing estate or city street. There has been a lot of controversy about one-off housing in recent years.

Arguments against 'one-off housing':

• The conservation organisation, An Taisce, maintains a policy against the 'bungalow blitz' in rural areas. They are against 'ribbon development' with individual houses built for three to four miles along the main road from a town or village. They say increased demand for private car use that follows from one-off housing developments will lead to a greater average carbon footprint for residents.

• 'One-off housing' draws people out of rural towns and villages, stifling the growth of these regions.

• Population growth is not desirable in 'ultra-rural' areas that should by right become natural recreational areas with land-owners employed in land-maintenance, forestry and tourism-related services.

• Economist, David McWilliams' view on the matter is clear: "If we have one-off housing, we cannot have a functioning public transport system, public health service, public education system or postal system, never mind universal access to broadband or cable".

Arguments for 'one-off housing':

• People should have the right to either build on land they own or else that people should have the right to build a house near to where their families live.

• Ireland has a dispersed pattern of settlement going back thousands of years and why should that change now?

In July, Environment Minister, John Gormley, issued a directive to the Council to ‘‘prioritise and develop residentially zoned lands in the Castlebar-Ballina hub over other locations in the county’’. The county councillors don't want new one-off housing having to be moved to the hubs of Ballina or Castlebar. They say currently, 70% of Mayo's population live outside of towns and villages and it's been like that for centuries and should remain so.

The councillors will present the case for their plan at a joint Oireachtas committee meeting on Tuesday.